Why Cold Calls Are Wrong For Most Organizations

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It’s not that I am against cold calls.

I just don’t think they are the most effective way to generate sales for most organizations.

Yes, they will work to get some activity. They are a great way to keep a sales team busy. They will create sales and increase revenue.

But are they the best way to go?

And most importantly, at the end of the day, are they onboarding the right clients that a company wants to work with?

EXAMPLE: Finding A Job

Let me explain my point of view by using an example most people could imagine, even if you didn’t go through it yourself.

The scenario: you are not working and need of a job.

Maybe your young and entering the job market for the first time.

Or you have experience but looking to change industries.

You search online (or you’re old enough to remember looking through the newspaper for jobs) and cannot find anything that you like for your focus.

But you know of some companies that you would like to work for.

So, you follow the advice given to you that said to put together your resume and show up at the company you are interested in. No appointment, just show up with the goal of dropping off a resume and asking to speak with HR or the hiring manager.

You walk into the first company, which has a very small lobby and no one to great you. After a few minutes you finally see someone, give them your resume and ask if they are hiring. They say no, but that they will pass your info on to HR.

The second company has a large lobby with a receptionist to greet you. They are nicer than the first company you went to and after 10 minutes of waiting they get the Hiring Manager for you to talk to. They tell you they’re not hiring but will keep your information “just in case.”

You do this for a few weeks, following up with the people you spoke with.

Then out of nowhere (well, really not “nowhere” – because of your persistence) one of the companies you visited sends you an email that they are interested in speaking with you. After some interviews, they hire you. They tell you that they are willing to take a chance on you, they don’t totally need to hire someone, but you were persistent.

They make you an offer, it’s less than you wanted and less than what you think they pay others. But you feel like you don’t really have a choice, so you accept the job.

One thing you notice after you start is that they seem to treat you like they are doing you a favor. Since you are the one that pursued them, asked them for the job, and got hired even though they weren’t thinking about bringing someone on board, it feels like they almost don’t want you there, or need you.

Being Persistent

Now we can all imagine how that would happen, and how it would feel. It has either happened to you or you have been on the business side of that type of relationship. If you haven’t, I am sure you can think about another situation where one party is persistently (nagging) pushing for something they want and the other party feels ambivalent to it but agrees to the proposal at some point, but then it doesn’t turn out well (some relationships start out this way, where one party is pushing the other to agree to dating).

The problem is that the asker, the nagger, the pushing party, is now at a disadvantage. The receiver of the efforts is in control and has all the power. They can decide the fate of the relationship. They are driving the bus and two things could potentially take place.

First, at any moment the receiving party could decide they do not want the relationship anymore and end it. They hadn’t wanted it in the first place, allowed the other party to persuade and/or manipulate them into agreeing. And then reached a point where they were no longer interested.

Or, the second scenario, is that during the life of the relationship the pursuing party must constantly “resell” themselves to the other party as to why they should continue. The pursued party is pulling back or threatening to stop, and the pursuer must sell and resell themselves to keep a hold on what they have, which could range from strong to tenuous.

Why Cold Calling Isn’t Ideal

I have been working with and observing sales organizations, as well as relationship dynamics and human behavior, for a long time.

This is the same way that cold calling sales relationships can go. Of course, there are times when a cold call will result in a perfectly equitable relationship built on your solution is exactly what the company/buyer needed at that exact moment.

But most of the time it results in the salesperson asking for (begging) for attention and then the business. When the relationship with a customer starts out with that a few dynamics could occur:

·         The non-proactive buyer will be price sensitive. They weren’t looking to buy anything, so it will essentially come down to a “what are you going to do for me since you are trying to sell me, I wasn’t looking for this?” statement or unconscious attitude. You are now going to be playing a pricing game to win the business. If you are selling something where a margin is already thin you could actually end up making a sale that generates no profit for the company (and I have even seen sales reps who cost the company with their sales – the price point is lower than the costs that went into generating and maintaining that client).

·         Once they agree to buy, they know that you asked them to buy – it wasn’t something they were thinking about realizing they “needed” (most salespeople think everyone NEEDS what they are selling). Because the relationship started this way, they are going to constantly question whether they want to continue. They might threaten to cancel regularly or to return the product. They could also take a passive-aggressive approach, avoiding your emails, calls, maybe even not paying the invoice or changing their credit card info so your payment drafts bounce. Your only option is to push harder to get in touch with them and constantly retain them by re-persuading them that they want what you talked them into in the first place.

Again, there are times where cold calling will work to effectively generate new, profitable business. In my experience, this will be determined by the skills of the salesperson. A weak sales rep or someone who tends to be more of an Order Taker will produce either very little results or what are basically “bad deals” or high maintenance drama clients that the company will want to fire.

What To Do Instead

So, what is the better alternative? The company putting money and effort into generating inbound prospect inquiries. This could be in the form of direct response (direct mail, etc.) campaigns, social media, digital, tradeshows, and any other way that would trigger potential customers to reach out to you.

When that happens, you are now in a more powerful place in the relationship. They came to you looking for help with a problem or to achieve a goal. They are actively shopping. Now your job shifts to begging and convincing, to diagnosing and prescribing for a patient that came to you.

You’re Better off Working the Market Qualified Leads

Now, of course, inbound leads are always ideal. And of course, it isn’t easy…if it was everyone would do it. If it were easy cold callers wouldn’t exist.

But it’s not as hard as everyone makes it out to be.

It’s all a matter of mindset. As Henry Ford said, “whether you think you can or can’t, you are right.” If you think the only way to generate business is to cold call or knock on doors, then you will only focus on that.

Just know there are better ways to generate new business that will also create less wear and tear on you/your sales team.

If you want help developing the sales success strategies for your team, email me at jason@cutterconsultinggroup.com or use the CONTACT Form to set up a time for us to talk.

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Want to talk about ways Jason can help your sales team? Email jason@cutterconsultinggroup.com
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